Coronavirus and the real estate market: catastrophe or temporary scare?
There’s hope that property markets will hit their pre-virus levels before the end of the year, but nothing is certain at the moment.
The global economy is stalling as the Corona virus continues to wreak havoc around the world. Air travel has been hit especially hard, the stock market has tanked, and fights erupt in supermarkets as people stockpile goods – the pandemic is tightening its grip and it seems no industry is immune from its effects, apart from hand sanitizer and paper mask producers.
The real estate market is feeling the squeeze. In Florida, for example, local news outlet WPTV has reported a drop in property prices as people put buying and renting on ice as they wait out the pandemic.
The Dow Jones index’s recent sharp fall due to the virus also did nothing to help the housing market, but is the situation as catastrophic as we think? Naples News, another local newspaper in Florida, points to the healthy pre-virus market and the fact that the latest economic downturn caused by the epidemic scare hasn’t inflicted major damage to the sector; the article even hints at a quick recovery and a good rest of the year for the industry.
Developed countries like Germany, France or the USA have already taken extensive and effective measures to curb the spread of the pandemic. As reported by CNBC, the outbreak in China is under control and economic activity is slowly recovering despite being seriously hampered by the fall in demand from Europe and Northern America – there’s hope that real estate markets can hit their pre-COVID-19 levels before the end of the year.
The current downturn in property prices in Florida and elsewhere is real and it is up to investors to choose whether to be prudent and wait for the situation to improve, or to jump in and buy a property at a lower price and loan interest rate while it lasts.